UMA SHH Resources gets UMA query over share price hike

by **Cals** Mon 02 Nov 2015, 19:09

UMA

[size=28]SHH Resources gets UMA query over share price hike

By Tan Siew Mung / theedgemarkets.com | November 2, 2015 : 6:17 PM MYT

KUALA LUMPUR (Nov 2): SHH Resources Holdings Bhd ([You must be registered and logged in to see this image.] Valuation: 0.80, Fundamental: 2.50), which has dismissed speculations that it was a potential acquisition target for bigger rival HeveaBoard Bhd ( Valuation: 1.40, Fundamental: 2.10) and today saw its share price surge almost 10%, was asked to explain the sharp rise by the local bourse regulator.

In the unusual market activity (UMA) query, Bursa Malaysia asked SHH Resources if there was any corporate development, business negotiation rumour, or report or any other possible explanation that could account for share price spike.

The Johor-based solid wood furniture manufacturer closed the trading hours at RM2.40, 17 sen or 7.62% higher; it had earlier risen as much as 9.87% or 22 sen to RM2.45 and was among the top 10 gainers on the bourse after some 251,000 shares were traded.

Its current price gives it a market capitalisation of RM111.5 million. Year to date, SHH Resources's share price, which is currently trading at its five-year high, has tripled.

SHH Resourcers had told The Edge Financial Daily - reported today - that it was not for sale but was instead looking at acquiring smaller furniture players in the industry. It has also allocated RM5 million as its capital expenditure for the financial year ending June 30, 2016 (FY16), to expand its capacity by up to 30%.

The company’s executive deputy chairman Ling Hee Keat said the company was in talks with few players and expects to finalise an acquisition in the next three to four months.

Ling also expects the company’s earnings to continue to be boosted by the strong US dollar, which would support better dividend payouts.

For the financial year ended June 30, 2015 (FY15), the company’s net profit fell 20% to RM6.58 million, mainly due to non-operational losses arising from the fair value losses on its derivative financial instruments in FY15, and a one-off RM2 million gain on disposal of a property in Muar that was recorded in FY14.

However, for the fourth quarter ended June 30, 2015, the company’s net profit was more than doubled to RM3.76 million, primarily because of the strengthening of the US dollar against the ringgit.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to[size=15][You must be registered and logged in to see this link.] for more details on a company's financial dashboard.)[/size]
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